Author Question: One of the most famous cartels is OPEC. a. True b. False Indicate whether the statement is true ... (Read 121 times)

segrsyd · **on:** Jun 30, 2018

One of the most famous cartels is OPEC.
a. True
b. False
Indicate whether the statement is true or false

Question 2

State one important consequence of Coasian reasoning on the analysis of contracts.

katheyjon · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

True

Answer to Question 2

Coasian reasoning has one very important consequence for the analysis of contracts. If the costs of negotiating and enforcing contracts are low relative to the benefits, buyers and sellers will have incentives to make economically efficient arrangements that increase value, and they will avoid making contracts that destroy it. Where transactions are costly, some legal assignments of rights will be more efficient than others.